Will Tiny Homes Change Mortgages?

Will Tiny Homes Change Mortgages?

An increasingly popular trend, particularly in many urban areas, is the tiny-house movement. To most people, these small buildings are scarcely large enough to qualify as rooms—some homes are a mere 150 square feet. While this may seem great for young singles, such a small space is certainly quite impractical for families.

What is perhaps even more amazing is that some buyers may still require the assistance of mortgage companies to complete the purchase. While some tiny homes sell for under $5,000, one listing on tinyhouselistings.com has a sale price of $229,000—more than what many full-size homes sell for. In fact, despite the relatively low prices of many tiny homes, nearly one third of all buyers still take out a mortgage on their purchase.

The rising popularity of the so-called “Tiny House Movement”—especially among Millennials—has led some industry analysts to proclaim, “this real estate trend isn’t going anywhere anytime soon.”

However, it is unlikely that the market for traditional homes (or the need for mortgage companies) is going anywhere, either. With even the largest of tiny homes coming in at a mere 500 square feet, they quickly become impractical after one gets married and has children.